FAQs

The time it takes to get a home loan can depend on the approval process and timeframe of the lender. Many brokers and lenders can get conditional approval for borrowers within 24 hours, depending on individual application specifics. The complexity of the loan and certain aspects of the application may require longer approval times. Buyers may use online calculators to estimate their borrowing capacity and repayments so they can start the property search based on those estimates.

A home loan comparison rate is the interest rate applicable to a specific mortgage as detailed in information alongside the displayed rate. It is the rate which is applicable on a loan at the advertised rated when lender fees and charges are included.

Options may be available for borrowers to mix fixed and variable rates with their mortgage. A portion of the loan is arranged at a fixed rate and the balance at a variable rate. This may enable the borrower to offset the possibility that variable rates may increase over the term of the fixed rate portion.

Fixed rate home loans are generally available for a term of 2-5 years. After that term ends, the homeowner will need to arrange a new loan through refinancing either with a different or the same lender.

Both a fixed and a variable rate home loan can be the most suitable option for a buyer, depending on individual circumstances and preferences. A fixed rate delivers a fixed repayment schedule which does not change through the period of the term. A fixed rate term is usually 1-5 years. A variable rate is subject to change and may increase or decrease depending on the rate market scenario. Depending on the interest rate market and RBA rate decision outlook, lenders may offer both fixed and variable rate loans or variable rate only.

Pre-approval for a home loan is approval of a loan application prior to a property purchase being made or a commitment to purchase being offered. It is also known as conditional approval as it is conditional on the details of the property to be financed. Buyers can apply ahead of buying by submitting the required documentation which includes financials such as tax returns, pay slips, bank statements and similar.

Borrowing capacity is the amount a lender is prepared to loan to an individual at a certain interest rate. Borrowing power is worked out on the individual’s current income and regular expenses. Individuals may increase their borrowing capacity reducing their ongoing expenses and paying out current debts and loans to improve their personal balance sheet.

Home loans with an offset account may save borrowers by reducing interest charges. The ability to make additional payments may reduce the loan faster and save on interest. A cashback offer may provide buyers with funds to put towards their loan or other purposes. Loans with lower rates will reduce monthly payments and total interest payable.

A mortgage broker provides home buyers with services which may ensure they secure the best rates and more quickly and easily find the lending product that suits their profile and purchase. Brokers source the best offers and products from many lenders using their resources, connections and intel. Saving buyers time and confusion. Brokers advise buyers of current offers, explain the options available to them, the benefits of fixed or variable rates at that time, and handle all lender contacts. Experienced brokers can use their leverage with lenders to negotiate better rates and mortgage terms.

Fees involved with home loans include stamp duty, conveyancing, and lender fees and charges. Stamp duty is calculated on the property value and varies with the state or territory. Conveyancing fees will depend on the provider’s fee structure. Lender fees can include a loan establishment fee and possibly a monthly service fee and other charges, depending on the lending product.

A lower home rate can reduce the total interest payable on the loan over the term. This can save buyers on interest and provide lower monthly payments. Whether the lowest rate is the most suitable option may depend on any conditions attached to the loan and if the mortgage suits individual objectives.

Buyers may get the best mortgage rate with a larger than the standard 20% deposit, lowering the amount they need for their loan and LVR and by improving their financial position and credit score.